The economic forecast for Heinz Ketchup will cover different factors that lead to the demand for ketchup and factors that lead to a change in the cost of production. The forecast will also show what economic indicators, Heinz, can continually review, to predict how demand for ketchup will change. This forecast will also help to show what the next two years should be like for these economic indicators. This paper will also show the confidence that Heinz can have in these indicators and finally will show the implications of the economic forecast and price elasticity from the pricing structure. Factors
Heinz must look at several different factors to predict how the sales of ketchup would be affected. The prices of hamburgers and hot dogs, the price of substitute products, such as, mustard and mayonnaise, and, consumer spending, are some of the factors that Heinz must review to understand what will affect the demand for ketchup.
As the price for hamburgers and hot dogs decrease, the demand for these products would increase. A popular topping for these products is ketchup, so it is reasonable to assume that demand for ketchup would also increase with a decrease in the price for hamburgers and hot dogs.
Another factor that will lead to a change in demand of ketchup is the price of a substitute product, such as, mustard or mayonnaise. If the price for one of these products is reduced then consumers may opt for these products over ketchup.
The final factor that Heinz should monitor to help predict a change in the demand of ketchup is consumer spending. If consumer spending decreases, then consumers may choose an inferior brand that is sold at a cheaper price over the Heinz brand.
Heinz must also be aware of the cost of tomatoes, as this is the prime ingredient for ketchup. A change in price of tomatoes will cause a change in the cost of producing ketchup....